Stack certifies Illinois-only class action against Travelers
Madison County Circuit Judge Daniel J. Stack certified an Illinois only "silent PPO" class action suit that was filed on the eve of the enactment of the Class Action Fairness Act (CAFA).
In his Oct. 15 order, Stack named The Lakin Law Firm as class counsel and Richard Coy and Frank Bemis as class representatives in the case against Travelers Casualty and Surety Company and The Travelers Indemnity Company.
Coy and Bemis, both chiropractors, claim Travelers lowered payments to them by claiming preferred provider organization (PPO) agreements, but without actually performing any of the associated obligations to those agreements using a practice known in the insurance industry as a silent PPO.
The chiropractors allege the defendants improperly withheld payments from them and the class for valid insurance claims.
A PPO is a network of healthcare providers which agree to offer preferred pricing in return for receiving patient referrals. Preferred providers are also board certified and credentialed in the community where they live and work.
Attorneys Brad Lakin and Jeffrey Millar asked Stack to certify a proposed class of all licensed Illinois healthcare providers whose reimbursements for medical services relating to work comp claims since March 28, 1996 were reduced by Travelers pursuant to a PPO discount.
Travelers, represented by Troy Bozarth of Edwardsville, asked Stack to deny certification because "this case is fraught with predominating indivualized issues" which are contrary to the principals of Avery.
Travelers argued that in Avery the Illinois Supreme Court reversed a lower court ruling that certified a nationwide breach of contract case finding material differences in just four contract forms defeated the commonality and predominance requirement of the Illinois class certification rule.
It also argued that Avery showed that Illinois consumer fraud claims are inappropriate for class treatment because whether a class member was deceived requires examination of what the class member knew and believed when hearing or seeing the allegedly improper statements.
Travelers says that Stack would have to determine numerous individual questions as to each alleged contractual relationship, beginning with whether any contract formed between the class member and them.
According to Travelers, Bemis and Coy could not fairly represent the class because the record lacks any evidence that they even contracted with them.
In addition, Travelers argues that both violated their PPO contracts by directly billing workers compensation patients.
Stack scheduled the case for a case management conference in late November.
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